(a) To explain: The rationality of an individual to pursue an MBA degree.

Question

Want to see the full answer?

Answer 1

Question

Chapter 1, Problem 7CACQ

To determine

(a)

To explain:

The rationality of an individual to pursue an MBA degree.

To determine

(b)

To explain:

The impact on applicants.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

A young person entering the job market may be talented or untalented.Suppose that one-quarter of high school graduates are talented, and the rest untalented. A recent high school graduate, who knows whether or not he is talented, has the option of spending a year traveling overseas or enrolling at college (we will assume that he or she cannot do both) before applying for a job. An employer seeking to fill a job opening cannot know whether or not a job applicant is talented; all he knows is that the applicant either went to college or traveled overseas. The payoff an employer gets from hiring a worker depends solely on the talents of the hired worker (and not on his educational level), while the payoff to the youth depends on what he chose to do after high school, on his talents (because talented students enjoy their studies at college more than untalented students), and on whether or not he gets a job. These payoffs are described in the following tables (where the employer is the row…

1. It is estimated that over 100,000 students will apply to the top 30 MBA programs in the United States this year. a. Using the concept of net present value and opportunity cost, explain when it is rational for an individual to pursue an MBA degree. b. What would you expect to happen to the number of applicants if the starting salaries of managers with MBA degrees remained constant but salaries of managers without such degrees decreased by 20 percent? Why?

As an employer, suppose you find it costly to monitor employee effort 100 percent of the time. What compensation options, in terms of the basis of pay, are available to ensure that you get appropriate levels of employee effort? What factors would you consider in choosing among these options?